Tencent TCEHY Stock Price, News & Analysis

The company’s revenue is arguably more diversified but as fast growing as the tech giants in the USA, and its investment portfolio is one of the largest in the world. Like Apple and Google, Tencent also has a suite of first party apps within WeChat that allow users to do things like pay friends/merchants, pay utilities and phone bills, call a taxi, order food delivery, buy movie tickets, do online shopping, talk to a doctor, read news, meet strangers, play games etc. China’s Tencent has taken over two ByteDance video games units after ByteDance retreated from the gaming business last year, according to a person familiar with the matter. As Tencent’s revenue growth stalls out, it’s divesting its non-core assets and reining in its operating expenses. That’s why it divested most of its stake in JD.com to its investors in the form of a special dividend earlier this year, and why it plans to do the same to its stake in the food delivery giant Meituan. That stabilization should allay some near-term fears regarding the segment, which was initially expanded through a restructuring four years ago to reduce the company’s dependence on video games.

Its domestic gaming revenue fell 7% year over year, representing its third consecutive quarter of shrinking revenue, as it grappled with tighter playtime restrictions for minors in China over the past year. Those restrictions also coincided with a temporary suspension on new video game approvals in China, which started last July and ended this inside the highly competitive world of proprietary trading (wiley trading) April. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.

  1. Shareholders of record on Friday, May 19th will be paid a dividend of $0.2691 per share on Tuesday, June 20th.
  2. China’s central bank has approved Tencent Holdings’ online payment platform Tenpay boosting its registered capital to 15.3 billion yuan ($2.13 billion), according to a central bank statement on Friday…
  3. Unfortunately, political risks are unavoidable when investing in Chinese companies.
  4. Like Apple and Google, Tencent also has a suite of first party apps within WeChat that allow users to do things like pay friends/merchants, pay utilities and phone bills, call a taxi, order food delivery, buy movie tickets, do online shopping, talk to a doctor, read news, meet strangers, play games etc.

It is quite natural for a company of that size to find it challenging to sustain high growth rates. Tencent also has parallel businesses to many of the successful businesses of the western FAAMG stocks. Riot Games, the developer of the popular “League of Legends” multiplayer battle game, is joining other tech companies that have been https://www.forexbox.info/alternative-investment-definition/ trimming their payrolls with a layoff of 11% of its staff. Chinese stocks surged on Tuesday amid reports of mooted stimulus plans and a sign that tough draft tech rules could be eased. Xiaolin Chen, head of international at KraneShares, discusses the Chinese tech company’s earnings and says it has “plenty of room” to diversify.

While the Chinese government’s new direction will not directly weaken Tencent’s competitive advantage (more on this later), it certainly puts its future profitability at risk. Unfortunately, political risks are unavoidable when investing in Chinese companies. For example, emerging markets stocks did quite well in the “lost decade” for USA stocks between 2000 and 2010.

But for now, analysts still expect Tencent’s revenue and net income to decline by 1% and 55%, respectively, for the full year. Its growth might accelerate in 2023 if its domestic gaming and advertising business stabilize, but I think those are still tall orders in this tough market. On the bright side, its advertising revenue rose 16% sequentially. During the conference call, President Martin Lau predicted its advertising business would start growing year over year again in “late 2022” as it monetizes more in-feed video ads and benefits from the gradual stabilization of the gaming, e-commerce, and fast-moving consumer goods markets. Given enough time, revenue growth will prove more important to stock returns than multiple expansion, and companies in both the east and west appear well positioned to further grow revenue.

Outside of companies subsidiary of its game division, Tencent as a whole has many major and minor investments in domestic and, since the 2010s, foreign game companies. Shareholders of record on Friday, May 19th will be paid a dividend of $0.2691 per share on Tuesday, June 20th. This is an increase from the stock’s previous dividend of $0.18. 3 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Tencent in the last twelve months. There are currently 1 hold rating and 2 buy ratings for the stock.

Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of China. Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People’s Republic of China and internationally. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of China.

This segment’s revenue rose 4% year over year during the quarter and accelerated from its 1% growth in the second quarter. Tencent mainly attributed that recovery to an acceleration in both “online and offline commercial payment activities,” and noted that it was scaling back some of Tencent Cloud’s unprofitable https://www.day-trading.info/boyds-laminated-wood-stocks/ services to strengthen its margins. Tencent (TCEHY 0.19%) posted its third-quarter earnings report on Nov. 16. The Chinese tech giant’s revenue fell 2% year over year to 140.1 billion yuan ($19.7 billion), which represented its second consecutive quarter of declining revenue since its IPO in 2004.

Tencent’s acquisitions

For this reason, I want diversified exposure to compelling growth opportunities in both markets. The online games segment consists of some China-specific titles but also many well known international titles like PUBG Mobile (#9 strategy game on the USA App Store). Their ownership of Supercell and Riot Games also gives them exposure to Clash Royale (#1 strategy), Clash of Clans (#5 strategy), and League of Legends (#28 strategy).

Tencent: An Overview Of Its Investment Portfolio And Businesses

Tencent is barely growing, yet its stock still trades at 20 times next year’s earnings. Therefore, I can’t consider it a value play — or an attractive investment at all — when so many other high-growth stocks are still on sale. With its dominant market position, Tencent has plenty of opportunities to profit from its captive users.

China’s Stocks Leap on Stimulus Report. Baby Bust, Other Woes, May Mean Aid Falls Short.

Tencent Holdings reported worse-than-expected results in the fourth quarter as the Chinese technology giant navigated a slowing economy. If that’s not enough, Tencent has proven to be an excellent tech investor, having bought stakes early on in what have become some of the region’s most prominent companies. One was that the company had become gigantic, generating 555 billion yuan  ($79.6 billion) in revenue in 2022.

As the S&P 500 hits new highs, Chinese stocks are closing in on lows reached more than a decade ago. Riot Games is laying off about 530 employees, which represents 11% of its workforce, the Tencent-owned company announced on Monday. The League of Legends maker is also sunsetting its five-year-old pub… China’s Tencent Holdings posted a 7% rise in fourth-quarter revenue on Wednesday, trailing analysts’ expectations, as China’s economic slowdown takes a toll. Chinese internet giant Tencent on Wednesday posted its lowest annual profit since 2019, despite slight improvements recently in China’s economy and a more lenient attitude taken by regulators towards …

On an adjusted basis, which excludes its investments and other one-time items, its net profit grew 2% to 32.3 billion yuan ($4.5 billion). Tencent had been a hallmark of consistent and sustainable growth, with an unbroken track record of growth since it went public in 2004. So when the tech company reported that its revenue and operating profit fell by 1% and 13%, respectively, in 2022, investors would have found it difficult to swallow.

On a slightly positive note, Tencent has somewhat recovered from its 2022 woes. It delivered respectable first-quarter 2023 results, with revenue and operating profit up by 11% and 9%, so the worst is probably over for the company. Besides, in the name of common prosperity, the government has indirectly extracted 100 billion yuan (about $15.5 billion) from Tencent.